717 F.3d 790 (10th Cir. 2013), 10-5152, United States v. Clark

Docket Nº:10-5152.
Citation:717 F.3d 790
Opinion Judge:HOLMES, Circuit Judge.
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Richard CLARK, a/k/a Rick Clark, Defendant-Appellant.
Attorney:Scott A. Graham (Anthony L. Allen, with him on the briefs), of Graham, Allen & Brown, PLLC, Tulsa, OK, for Defendant-Appellant. Claire McCusker Murray, Appellate Section, U.S. Department of Justice, Washington, D.C. (Thomas Scott Woodward, United States Attorney, Catherine J. Depew, Assistant Uni...
Judge Panel:Before HARTZ, O'BRIEN, and HOLMES, Circuit Judges.
Case Date:June 18, 2013
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit

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717 F.3d 790 (10th Cir. 2013)

UNITED STATES of America, Plaintiff-Appellee,


Richard CLARK, a/k/a Rick Clark, Defendant-Appellant.

No. 10-5152.

United States Court of Appeals, Tenth Circuit

June 18, 2013

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Scott A. Graham (Anthony L. Allen, with him on the briefs), of Graham, Allen & Brown, PLLC, Tulsa, OK, for Defendant-Appellant.

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Claire McCusker Murray, Appellate Section, U.S. Department of Justice, Washington, D.C. (Thomas Scott Woodward, United States Attorney, Catherine J. Depew, Assistant United States Attorney, Northern District of Oklahoma; Kevin B. Muhlendorf and Andrew H. Warren, Trial Attorneys, Lanny A. Breuer, Assistant Attorney General, Criminal Division, Greg D. Andres, Acting Deputy Assistant Attorney General, Criminal Division, and Joseph Palmer, Attorney, Criminal Division, Appellate Section, U.S. Department of Justice, Washington, D.C., on the brief), for Plaintiff-Appellee.

Before HARTZ, O'BRIEN, and HOLMES, Circuit Judges.

HOLMES, Circuit Judge.

Defendant-Appellant Richard Clark was charged and convicted of multiple counts relating to his participation in a " pump-and-dump" securities fraud scheme. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm Mr. Clark's conviction.

I. Factual and Procedural Background

This case arises from a classic pump-and-dump scheme that was orchestrated principally by Mr. Clark's co-defendant, George David Gordon. In a separate opinion, we recently affirmed Mr. Gordon's convictions and sentence. See United States v. Gordon, 710 F.3d 1124 (10th Cir.2013). In doing so, we set forth in considerable detail the relevant factual and procedural background related to the government's prosecution of the pump-and-dump scheme. See id. at 1128-33. Consequently, we will not fully reiterate that discussion here. Instead, we offer at the outset a factual and procedural overview, and then in connection with the resolution of Mr. Clark's specific legal challenges, we explicate necessary additional facts.1

In summary, the government alleged that Messrs. Gordon and Clark and other

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co-conspirators manipulated the shares of several " penny-stock" companies by using false and backdated documents to make those shares publicly tradeable, engaged in coordinated trading among themselves to create the false appearance of an active market for the shares, and promoted the shares through misleading promotional campaigns. See, e.g., id. at 1128 & n. 2. The shares were sold to unsuspecting buyers after their prices had surged, and the conspirators laundered the proceeds through an array of bank accounts and nominees. The conspirators subsequently covered up their misconduct in interactions with the Securities and Exchange Commission (" SEC" ).

A. Investigation and Pretrial Proceedings

The conduct in this case can be traced back to 2004 when Mr. Gordon began dealing with Mark Lindberg and Joshua Lankford, two Dallas stock promoters— both co-conspirators— and collaboratively targeting with them various companies for the fraudulent scheme's purposes. Through a sequence of transactions, the conspirators established and fraudulently promoted the stock of three companies: National Storm Management (" National Storm" ), Deep Rock Oil & Gas (" Deep Rock" ), and Global Beverage Company (" Global Beverage" ). See id. at 1129-32.

In 2004, SEC official Samuel Draddy began looking into an unrelated Pink Sheet 2 company that had " unusual trading surrounding its stock and appeared to be the subject of a promotional campaign." R., Vol. VIII, at 1753 (Test. of Samuel Draddy, dated Apr. 15, 2010). This led to further investigation of other " similarly-situated [stock] issuers" with unusual trading patterns and promotional campaigns. Id.

After taking a deeper look, investigators noticed that the companies under consideration evinced similar patterns where " the people involved owned shells, [that] were publicly-traded issuers that had no legitimate business purpose, ... [and] [t]hey would ... get private companies to reverse-merge into these shells so they could get publicly traded." Id. at 1754; see also id., Vol. I, at 55 (noting in the instant indictment that " [t]o obtain the free trading shares, the perpetrators may orchestrate a reverse merger, which occurs when a privately held company with no publicly traded stock merges with a publicly listed shell company that has no assets or revenue but has stock available for public trading, resulting in a public company" ). Based on this discovery, the investigators turned their attention to the activities of the companies involved in this case. During that investigation, Mr. Clark testified before the SEC. He made various statements, including an allegedly false denial that he controlled nominee entities involved in the Deep Rock trading scheme.

In July 2007, approximately eighteen months prior to the commencement of criminal proceedings against Mr. Clark, the government placed a caveat on his residence. See generally Black's Law Dictionary 252 (9th ed. 2009) (defining " caveat" as " [a] warning or proviso" ). No notice was given to Mr. Clark at that time, and he was not aware of the caveat until July 2008 " when he was attempting to obtain funds to retain counsel." Aplt.

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Opening Br. at 2. The government temporarily lifted the caveat in June 2009 to allow Mr. Clark to renew an existing loan on his home, and reimposed it in July 2009. The government then completely lifted the caveat in October 2009.

On January 15, 2009, the grand jury returned a twenty-four-count indictment against the members of the conspiracy, including Mr. Clark. Mr. Clark was named in Counts 1-21: specifically, conspiracy (Count 1), in violation of 18 U.S.C. § 371; wire fraud (Counts 2-10), in violation of 18 U.S.C. §§ 1343 and 2(a); securities fraud (Counts 11-15), in violation of 15 U.S.C. §§ 78j(b), 78ff, 17 C.F.R. § 240.10b-5, and 18 U.S.C. § 2(a); and money laundering (Counts 16-21), in violation of 18 U.S.C. §§ 1957(a) and 2(a).

B. Trial

At trial,3 the government called witnesses to summarize the details of the conspiracy, including Mr. Lindberg and Richard Singer (another co-conspirator); both men had pleaded guilty to criminal offenses related to the conspiracy. SEC Investigator Draddy testified about the promotional campaigns and Mr. Clark's testimony before the SEC. Other witnesses were called to summarize documentary evidence. Mr. Clark unsuccessfully moved to sever his trial from Mr. Gordon's due to the alleged potential for a prejudicial spillover of evidence that was admitted concerning both Mr. Gordon and the other co-conspirators. Mr. Clark ultimately was convicted of fourteen of the twenty-one counts for which he was indicted. He was sentenced to 151 months' imprisonment.4

II. Discussion

Mr. Clark asserts numerous grounds of error. He claims that the pretrial placement of the caveat on his property violated his constitutional rights and that the evidence was insufficient to convict him. He further contests the district court's refusal to appoint an additional or a substitute defense counsel who was well versed in complex securities matters and the court's failure to sever his trial from Mr. Gordon's. He also contends that his rights under the Speedy Trial Act were violated by the roughly fourteen-month delay between the filing of the indictment and commencement of trial. We address each contention but discern no reversible error.

A. Constitutional Challenges Arising from the Government's Caveat

Mr. Clark claims that " [t]he government violated [his] constitutional rights to due process and a fair trial" in its pre-indictment decision to place a caveat on his home, without notice. Aplt. Opening Br.

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at 6. By the time the government lifted the caveat on Mr. Clark's home, he claims that he had no income because of the government's other post-indictment restrictions on his business activities— viz., restrictions concerning his ability to liquidate various stock holdings. Therefore, Mr. Clark allegedly was unable to pay for chosen counsel and unable to secure a loan against his house for the same purpose.5

Mr. Clark claims that the government acted wrongfully in imposing the caveat on his house. He reasons that his house was not forfeitable property. 6 As a consequence, once the caveat was imposed, he contends, the Due Process Clause of the Fifth Amendment, as interpreted in our decision in United States v. Jones, 160 F.3d 641 (10th Cir.1998), required a post-restraint, pretrial hearing on whether the house was in fact forfeitable property— a hearing that Mr. Clark says he was wrongfully denied.

" We review de novo the extent of constitutional rights...." Jones, 160 F.3d at 645; see United States v. Rivas-Macias, 537 F.3d 1271, 1276 (10th Cir.2008). However, when a defendant does not properly raise a challenge in the district court, and " there is no suggestion of a knowing, voluntary failure to raise the [claim]," it is forfeited and our " rigorous plain-error standard governs our review." United States v. Cooper, 654 F.3d 1104, 1117 (10th Cir.2011). Under this rigorous standard, a defendant must demonstrate: " (1) an error, (2) that is plain, which means clear or obvious under current law, and (3) that affects substantial rights. If he satisfies these criteria, this Court may exercise discretion to correct the error if [4] it seriously affects the fairness, integrity, or public

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reputation of judicial proceedings." Id. (alteration in original) (quoting United States v....

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